Posts Tagged wind

Last week was something of a trial: bits of my little farm were being washed out to sea, tracks were eroding, and our road was closed by slips and rockfalls. Just another in a sequence of extreme weather events that have got the locals in North Canterbury wondering about the weird weather being inflicted on them. In my Daily Blog post this week — You Ain’t Seen Nothing Yet — I note that worse is on the way, and there’s little we can do beyond battening down the hatches.

Kathryn Ryan’s interview earlier this week with Michael Eckhart, Managing Director and Global Head of Environmental Finance and Sustainability at the giant investment bank Citigroup was arresting. He was in New Zealand as a keynote speaker at the Wind Energy Conference and Ryan asked him about a recent report from Citi, Energy Darwinism: The Evolution of the Energy Industry, which claimed the world is entering the age of renewable energy and explored the consequences for generators, utilities, consumers and fossil fuel exporters. There’s a good exposition of the report on this blog post.

Eckhart explained the three big costs in producing electricity – the fuel, paying off the loan for the plant, and operational maintenance. In the case of coal and natural gas generation all three costs are involved and there’s no way of knowing what the cost of the fuel will be in the future. With wind and other renewables “there is no fuel cost at all: none”. Once the loan for the plant is paid off there are no further costs other than operational.

Ryan asked why investment in renewables is dropping as the costs are coming down. Eckhart in reply spoke of an anomaly:

“We had a very successful industry emerging coming out of the United States, Europe … manufacturing these solar cells, these solar panels, and along came China, and China just produces things at a lower cost and China made a priority – this became a priority industry under the government of China … and they came out with panels costing half as much.”

Investors in Western companies consequently took a hit and investors in the new Chinese companies did very well “and it’s all a big mix now”. The surviving Western companies are still there and very successful though many companies have closed. The industry has a new profile. Japan and the Middle East are also now part of the picture. The industry is evolving all the time.

Ryan then mentioned the difficulties wind energy is facing in the US with the emergence of cheap shale gas and the withdrawal of subsidies leading to a real hit to investment.

In response, Eckhart spoke in general terms of the world being 40 years into a 100-year transition to clean energy. Renewable energy is on a large scale around the world. “It’s a 250 billion dollar per year industry – that’s how much capital’s being invested in it”. It’s a big industry competing with conventional power “better and better all the time”. In the US right now low-cost natural gas is gaining some share against renewables, but that’s not going to be a long-term trend. He spoke of the big forcing functions like climate change, environmental protection, human safety and stabilisation of energy costs. He stressed that stabilisation is one aspect of renewable energy that is often overlooked. Once a wind or solar project is built and financed the cost of its electricity is fixed for the life of the plant. Stabilisation of energy costs is important for countries.

When Ryan pressed the question of subsidies for wind and the pressure they are coming under in some countries Eckhart replied that subsidies are better seen as incentives, or compensation for public benefit. Non-pollution from renewables is a public benefit. But there’s nothing in the market to pay for that.

Solar presently counts for a quarter of a percent of the US electricity supply. How, asked Ryan, do you get a big transition moving from that small base?

Eckhart instanced Bill Gates making a fortune from the point when PCs were at only two percent of the computing power in the world. It’s the future that matters. He distinguished the three layers of the industry. First, the technology and manufacturing companies who produce the equipment to harvest the natural energy. Second, the developers, owners and operators of the renewable power plants. Third the utilities that buy that electricity to sell it to us. The profitability of the manufacturing layer might for the present be bad because of the Chinese dominance of the space. However the drop in prices has benefited the developers who are buying the panels and putting them to service. That’s where the fortunes are currently being made. The utilities have been taken somewhat by surprise and are still figuring out how this impacts their business.

Market adjustment is called for. Those who adjust fastest are going to benefit. Those who stand still might be impacted negatively. The world is changing. We are in a century of massive technology innovation and adoption.

I appreciated Eckhart’s forthrightness, all the more because of the investment banking environment from which it comes. But the question the interview left me pondering was whether the forcing function of climate change that Eckhart refers to will be felt strongly enough to speed up the process that he sees as inexorably under way. Forty years into a hundred-year transition doesn’t sound far enough from a climate change perspective. Our own government is happy enough to look forward to fully renewable energy in the long run, but only after as much profit as possible is taken from fossil fuels. The remaining sixty years of Eckhart’s hundred need to be condensed to thirty before we can safely take heart from the kind of analysis he makes.

This is just brilliant: click on the image to see an animation of atmospheric flows around the planet, coded by Cameron Beccario, using forecast data from NOAA1. It’s mesmerising and addictive, but educational and informative too. Click on the “earth” on the bottom left of the web page, and a menu pops up that allows you to choose different layers of the atmosphere (explained on the about page). Click on 250mb to see the jet streams that guide storm tracks. This is what they looked like over New Zealand yesterday (the brighter the colour, the faster the winds).

If you click and drag the globe, you can choose your viewpoint and zoom in or out. Here are the jet stream tracks above the northern hemisphere yesterday:

You can also play with different map projections – the row of letters in the menu – go backwards and forwards through forecasts, and click to hover above your location (the circle in brackets). Beccario was inspired by the hint.fmwind map of North America, and cut his teeth by coding a wind map for Tokyo. Wonderful stuff.

Something of a global warming (coverage) hiatus has hit Hot Topic in the last couple of days, courtesy of the rather dramatic gale that hit my part of New Zealand on Tuesday evening. We are all well, and suffered no damage to our house — but there’s a hell of a lot of tidying up to do to damaged trees and fences, and we are still without power and mobile phone coverage. With luck we’ll get reconnected in the next day or so. Normal bloggage will resume as soon as I finish chainsawing fallen branches and clearing debris.

In this week’s news-packed edition of The Climate Show we have an exclusive interview with Jim Salinger, probably New Zealand’s highest profile climate scientist, talking about extremes and the shape of things to come. John Cook discusses his new paper with Stephan Lewandowsky, Recursive fury: Conspiracist ideation in the blogosphere in response to research on conspiracist ideation, which is already upsetting climate cranks around the world, plus we look at carbon bubbles, renewable energy beating coal on price, and a simply superb iPad app.

Watch The Climate Show on our Youtube channel, subscribe to the podcast via iTunes, listen to us via Stitcher on your smartphone or listen direct/download from the link below the fold.

Writing in the latest newsletter from the NZ Wind Energy Association CEO Eric Pyle rebuts the idea expressed by some market analysts that because there is significant excess of electricity generation capacity in NZ and demand is flat there is no need to build new generation. He tackles them on economic ground and it’s interesting that he claims new wind generation is justified in purely market terms, without invoking its environmental benefits.

Markets should encourage innovation and drive least-cost solutions. In the electricity sector this means lower cost generation is used instead of higher cost generation. This happens on an hourly basis in New Zealand’s electricity market. This does mean there will be excess capacity as more expensive generation is replaced over time by lower cost generation.

Here’s the market logic for wind generation:

If wind is genuinely the most cost-effective form of new generation and has a lower cost of energy than some existing generation, then wind generation will be built. The more expensive generation will be used less and less until it is retired. In this light, the excess capacity is a shift to the most cost-effective generation at the time and a product of a well-functioning market.

And some interesting figures on what is happening to the costs of wind generation, confirming the role of improvements in technology in driving down costs (as we can expect to be the case in all forms of renewable energy):

Analysis of 2010 data by Deloitte indicates that wind is being developed for as low as $78/MWh in NZ, which is competitive with the costs of other forms of generation. The general view in the wind industry is that costs have reduced since that analysis was completed, and will continue to do so as turbine technology continues to improve.

Some very interesting analysis from the US National Renewable Energy Laboratory and the International Renewable Energy Agency (IRENA) highlights that the cost of energy (expressed as dollars per megawatt-hours) from wind turbines is falling, and more notably so when the cost of raw materials, such as steel, is levelised. The key point from the analysis is that the amount of energy able to be produced is increasing for any given site as a result of improvements in technology.

The impact of improving technology is positive for the bottom line of wind farm developers – the cost of energy is reducing, all other factors being equal. For example, wind turbine manufacturer Gamesa has publicly stated that it expects the cost of energy from wind turbines to reduce 30% over the next three years as a consequence of improvements.

He concludes with the possibility that we may be seeing renewable energy winning out over fossil fuel-powered sources in purely market terms:

Rather than a problematic excess of capacity, perhaps we are seeing the electricity market working coupled with fundamental changes to the costs of generation. New wind farms are one sign of this, signals that the coal units at Huntly will be phased out are another sign.

We must move quickly and substantially to renewable energy if we are to have any hope of mitigating dangerous climate change. For anyone who understands what the science is telling us, that is the primary imperative. The imperative would be unchanged even if renewable energy was more expensive than energy from the burning of fossil fuels. But there are many signs that the trumpeted relative cheapness of fossil fuels is overstated and that once the technologies for renewable sources are developed and adequately employed they hold their own and more. The claimed cheapness of fossil fuels is in any case a mirage since the environmental costs of their use are externalised and left for others to meet. Increasingly it becomes apparent that a green economy can function quite as well as that which was based on fossil fuels and without the attendant dangers.

Here in New Zealand Ministers who can’t move beyond thinking for the foreseeable future of a transport system powered by oil and serviced by heavy expenditure on new roading, for example, need to be jolted out of their lethargy. In a time of transition yesterday’s orthodoxies mean today’s missed opportunities. The success of wind may prove a paradigm for many new avenues to an economy which functions without continually adding to atmospheric CO2 levels.

Two wind energy items arrived in my inbox in close proximity recently. One was from the NZ Wind Energy Association (NZWEA) congratulating Meridian Energy on turning the first sod at Mill Creek wind farm in the Ohariu Valley north-west of Wellington. It’s a 60 megawatt farm of 26 turbines. The project will cost $169 million and is expected to be commissioned by mid-2014. It will increase NZ’s installed wind capacity from 623 megawatts to 683 megawatts.

NZWEA’s chief executive made appropriate remarks to accompany the announcement, reiterating the expectation that at least 20% of NZ’s electricity will be generated from wind by 2030 and noting the technology advances in harnessing wind which is now one of the lowest cost options for new generation in New Zealand.

It’s good to see the steady progress in the development of wind energy in NZ, although it seems to arouse little excitement in Government circles who reserve most of their interest for further fossil fuel development. And a report in Saturday’s NZ Herald was a sobering reminder that the $7 billion invested in the oil and gas sector over the past five years puts it far ahead of any other local sector when it comes to investment in new productive capacity. NZ is hardly on the brink of transition from fossil fuels, hardly, it seems, even interested in the possibility while there’s money to be made from exploiting them.

The second item was from the Earth Policy Institute (EPI), and reported that offshore wind development is picking up pace. Globally wind power now has 238,000 megawatts of capacity installed. Most of that is land-based, but the focus of the article was on the rise in offshore wind capacity, which has expanded nearly six-fold since 2006 to currently stand at 4600 megawatts. The article provides a useful overview of the prospective future development.

More than 90% of the offshore wind installations are in Europe, where the UK leads the way with 2500 MW, over half the world total. Outside Europe, only China and Japan have operational offshore wind farms. Although its first offshore project was not installed until 2010, China already ranks fourth behind the United Kingdom, Denmark, and Belgium, with 260 megawatts. And China is poised for big development. The government’s goal is 30,000 megawatts of offshore capacity by 2020. This could generate the equivalent of roughly one fifth of China’s current residential electricity consumption. Elsewhere in East Asia, South Korea has big plans for offshore wind, targeting 2,500 megawatts by 2019.

The US by contrast is moving only slowly in offshore development. It trails only China in land-based wind generating capacity but has yet to install a single offshore turbine. After a decade of fending off opposition a proposed 470-megawatt project off the coast of Massachusetts aims to begin construction next year, as do two other East Coast projects. A proposed offshore “transmission backbone” of highly efficient underwater high voltage direct current cables financed by Google and other investors would stretch some 300 miles from New York to Virginia, and could connect around 7,000 megawatts of offshore wind to the Mid-Atlantic’s population centres. It’s now under environmental review and complete construction would take approximately 10 years. The National Renewable Energy Laboratory estimates that wind turbines installed in the shallow waters of the Mid-Atlantic region could add up to nearly 300,000 megawatts of capacity—enough to power 90 million U.S. homes. For the entire Atlantic Coast, including deeper waters, the resource is estimated at 1 million megawatts.

The EPI report claims that nine of the top ten carbon dioxide emitting countries in 2010 have more than enough offshore wind energy potential to meet all their current electricity needs. (Iran is the exception.) Russia’s offshore wind resources, for example, exceed its current electricity demand by a factor of 23. Canada’s current electricity needs could be met 36 times over with domestic offshore wind energy.

It’s clearly an enormous resource, albeit not one that all the countries concerned are racing to exploit. Current leaders in offshore wind are expected to remain the principal sites for deployment, with China, the UK and Germany accounting for more than 70% of new installations.

Lester Brown is founder and president of EPI. His well-known Plan B, to which this article is one of many updates, called in 2009 for a crash programme to develop 3 million megawatts of wind generating capacity by 2020, enough to satisfy 40% of world electricity needs. There’s little in what is reported here to suggest we are on track to that sort of figure. Indeed, this update merely concludes: “As interest grows and technology advances, offshore wind appears headed for a prominent position in the world’s renewable energy mix.”

It’s not difficult to see the promise in renewable energy, but it is difficult as yet to see sufficient development to suggest we are serious about decarbonising our economies. It can even seem a little foolish to make much of the promise of renewables, given the political strength of climate change denial and the determination of vested interests to hold on to fossil fuel industries. It’s easier to lament the apparent incapability of the world’s political leadership to challenge the disastrous route we are on than to paint hopeful prospects for clean energy. But there is movement, either with or without government support, and it’s important to publicise that and to say over and over again that we do not need to burn fossil fuels to obtain reliable and abundant power.

“Will we look into the eyes of our children and confess that we had the opportunity, but lacked the courage? That we had the technology, but lacked the vision?” These words preface the report Energy [R]evolution 2012: A Sustainable World Energy Outlookpublished this month by Greenpeace, the European Renewable Energy Council and the Global Wind Energy Council. It’sthe fourth edition in a series which began in 2007. The publication is book length and over its pages describes a renewable energy scenario which sees CO2 emissions fall 85% from 1990 levels by 2050. I thought it well worth drawing attention to.

The authors can hardly be accused of utopian dreams. The technology exists to access stores of renewable energy far larger than the world’s energy requirements. The publication describes in careful and comprehensive detail an achievable programme of transition which would leave no need for the world’s fossil fuel resources to be pursued to the point of exhaustion or anywhere near it. Carbon capture and storage is not part of the scenario, for reasons of cost and uncertainty; nor is nuclear energy, which, for reasons of cost, safety and inability to reduce emissions by a large enough amount, is marked for phase-out.

The reduction of demand through energy efficiency, the “sleeping giant” which offers the most cost-effective way to reform the energy sector, is a vital element in the transition. Over and over again surveys and analyses are making this clear, and the report is very much in line with an increasingly common theme in the literature. High levels of projected energy demand diminish dramatically when energy efficiency is given high priority. The document shows the effect of best practice in various sectors of the economy.

The kind of material this and similar publications provide ought to be what government departments concerned with energy and economic development are constantly poring over as they seek sustainable growth. In fact many of them seem more likely to be trapped in the fossil fuel mode, welcoming renewable energy only when it proves economically competitive with that provided by fossil fuels, pursuing efficiency only when the cries of protest are not loud. Sustainable energy remains only a tantalising prospect under such circumstances, no matter how feasible it is. It’s therefore no surprise that the report includes a demand (their word) for policy changes and decisive action from governments to make the energy revolution real and to avoid dangerous climate change. They list eight demands in all:

1. Phase out all subsidies for fossil fuels and nuclear energy.

The report says US$600 billion per annum is spent in subsidies to fossil fuels. Even so, it points out, renewables manage to be directly competitive with such heavily subsidized conventional generation in an increasing number of markets.

2. Internalise the external (social and environmental) costs of energy production through ‘cap and trade’ emissions trading.

Not only withdrawing subsidies but also factoring in the cost of climate change from greenhouse gas pollution would, the report goes so far as to maintain, remove the need for special provisions for renewable energy. In market terms it would level the playing field across the energy sector.

5. Reform the electricity markets by guaranteeing priority access to the grid for renewable power generators.

8. Increase research and development budgets for renewable energy and energy efficiency.

It will no doubt be argued that some of the later demands in this list offer special protection to renewable energy. But if they do it is only because the threat of climate change is so dire as to justify the small interference in market operation that they represent. The push for renewable energy isn’t some kind of market manoeuvre. It’s a necessity for a liveable climate. Nevertheless a remarkable feature of the kind of scenario that the report produces is that its future costs are favourable by comparison with a fossil fuel based economy. The level of government support for renewable energy does not result in much more expensive electricity, for example. Here’s what the report has to say:

Under the Energy [R]evolution scenario the costs of electricity generation increase slightly compared to the Reference scenario (a scenario reflecting a continuation of current trends). This difference will be on average less than 0.6 $cent/kWh up to 2020. However, if fossil fuel prices go any higher than the model assumes, this gap will decrease. Electricity generation costs will become economically favourable under the Energy [R]evolution scenario by 2025 and by 2050, costs will be significantly lower: about 8 $cents/kWh – or 45% below those in the Reference version.

Employment prospects are also much improved by comparison with the Reference scenario.

There are 23.3 million energy sector jobs in the Energy [R]evolution in 2015, and 18.7 million in the Reference scenario. In 2020, there are 22.6 million jobs in the Energy [R]evolution scenario, and 17.8 million in the Reference scenario. In 2030, there are 18.3 million jobs in the Energy [R]evolution scenario and 15.7 million in the Reference scenario.

Even private car transport is treated gently under the Energy [R[evolution scenario:

Significant savings are made from a shift towards smaller cars triggered by economic incentives together with a significant shift in propulsion technology towards electrified power trains – together with reducing vehicle kilometres travelled per year.

The preface to the report speaks of courage and vision. Perhaps that is what the requirements look like to nervous politicians. But good sense would do equally well.

Aafter a busy month of harvesting (Gareth) and breakfast broadcasting (Glenn), the Climate Show returns with all the latest climate news: from the thinning of Antarctic ice shelves and the intensification of hydrological cycle (floods and drought, that is) to satellites capturing solar energy and beaming it down to earth, we’ve got it all. And if that weren’t enough, John Cook looks at a new paper that explains the apparent lag between warming and CO2 increase at the end of the last ice age, and tips us off about an excellent outtake from ABC’s recent I Can Change Your Mind about Climate documentary, featuring Naomi Oreskes.

Watch The Climate Show on our Youtube channel, subscribe to the podcast via iTunes, listen to us via Stitcher on your smartphone or listen direct/download from the link below the fold.

“What’s really interesting is just how sensitive these glaciers seem to be,” added Pritchard. “Some ice shelves are thinning by a few metres a year and, in response, the glaciers drain billions of tons of ice into the sea. This supports the idea that ice shelves are important in slowing down the glaciers that feed them, controlling the loss of ice from the Antarctic ice sheet. It means that we can lose an awful lot of ice to the sea without ever having summers warm enough to make the snow on top of the glaciers melt – the oceans can do all the work from below.”

The international community must bring the 1.3 billion people living on less than $1.25 per day out of absolute poverty, and reduce the inequality that persists in the world today. This will require focused efforts in key policy areas including economic development, education, family planning and health.

The most developed and the emerging economies must stabilise and then reduce material consumption levels through: dramatic improvements in resource use efficiency, including: reducing waste; investment in sustainable resources, technologies and infrastructures; and systematically decoupling economic activity from environmental impact.

Reproductive health and voluntary family planning programmes urgently require political leadership and financial commitment, both nationally and internationally. This is needed to continue the downward trajectory of fertility rates, especially in countries where the unmet need for contraception is high.

Population and the environment should not be considered as two separate issues. Demographic changes, and the influences on them, should be factored into economic and environmental debate and planning at international meetings, such as the Rio+20 Conference on Sustainable Development and subsequent meetings.

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